EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5520; (P) 1.5591; (R1) 1.5643; More

EUR/USD edges further lower to 1.5516 in early US session. While EUR/USD is losing some intraday downside momentum, bias remains mildly on the downside as long as 1.5664 minor resistance holds. As discussed before, EUR/USD should have at least made a short term top after completing a diagonal triangle that started at 1.5342 with bearish divergence condition in 4 hours MACD and RSI. Also, the diagonal triangle should also be the last advance in a five wave rally that started at 1.4309. Hence further decline is expected towards 1.5342/66 cluster support (38.2% retracement of 1.4309 to 1.6019 at 1.5366). On the upside, above 1.5664 will indicate that an intraday low is in place and bring recovery. But upside should be limited by 1.5773 resistance and bring fall resumption.

In the bigger picture, firm break of 1.5342 support, which will also have EUR/USD sustaining below 55 days EMA (now at 1.5490) too, will confirm that rise from 1.4309 has completed with bearish divergence condition in daily MACD and RSI too. In such case, deeper decline should then be seen to 1.4309 and 1.4966 support zone. However, strong rebound will suggest that price actions from 1.6019 is probably just developing into another sideway consolidation. But still, risk is on the downside before sustained break of 1.6019 high.

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